US equities are hovering near record highs, yet market sentiment is showing a rare divergence from price action—positioning is low, hedging demand is rising, and institutional investors remain largely on the sidelines. Nomura strategist Charlie McElligott attributes the core pressure behind this phenomenon to a trio of overlapping "negative risk triangle" factors, warning of potential deleveraging triggers in the market.

In his latest research note, McElligott explained that the so-called "negative risk triangle" refers to the combined pressure of three concurrent risks currently facing the market: geopolitical tensions, upward pressure on interest rates, and uncertainty over the inflation outlook. These three concerns stack on top of each other, keeping institutional net exposure at extremely low levels—according to Goldman Sachs Prime Brokerage data, net leverage for US fundamental long/short funds is only at the 6th percentile of the past year, having fallen back to levels near those seen around "Liberation Day." Meanwhile, Goldman's sentiment indicator has returned to negative territory, hitting a new low since March.

The subdued sentiment is also reflected in the derivatives market. John Flood, Goldman Sachs' head of US equity sales trading, noted that on each attempt by the S&P 500 to break to new highs, the volatility of intraday upside moves is nearly twice that of downside moves, and the correlation between call option implied volatility and spot prices is significantly above historical averages—this is not what a "fully positioned" market should look like. Additionally, short interest in Nasdaq futures has increased 35% since mid-June, and short positioning in the median S&P 500 component stock remains elevated.

The "Negative Risk Triangle": Triple Pressure Weighs on Sentiment

McElligott clearly attributes the root cause of current market pessimism to three concurrent downside pressures: geopolitical tensions, the threat of persistently higher rates, and uncertainty over the inflation path. This assessment aligns closely with observations from Goldman Sachs. John Flood said these three categories of concerns appear in almost every conversation he has with clients. Following July's historic momentum crash and August's dismal performance, investors generally lack the "appetite to attack," with positioning and sentiment both under pressure.

John Schlegel, head of positioning intelligence at JPMorgan, also noted in his latest research that despite last week's market volatility, overall positioning changed little, with retail and institutional sentiment both showing signs of turning down or stalling. Goldman Sachs Prime Brokerage data shows total and net leverage for US fundamental long/short funds at 207% and 49.8%, respectively, sitting at the 20th and 6th percentiles of the past year, and the 59th and 10th percentiles of the past three years.

Yen Carry Trade Unwinding: Another Source of "Invisible Pressure" on Equities

Beyond the triple-risk narrative, McElligott and several Goldman Sachs traders also point to another potential pressure source: the accelerated unwinding of yen carry trades. Rich Privorotsky, head of delta-one trading at Goldman Sachs, noted that US Treasury Secretary Bessent has recently been unusually explicit, stating "I'm now the bookmaker... you can bet against me," and claiming the Treasury has an informational advantage in understanding Japanese policymakers and the Bank of Japan's moves. Against this backdrop, the market is betting on BOJ tightening and capital repatriation, with the yen continuing to appreciate.

Privorotsky believes that the more notable second-order effect for equities is that as yen-funded carry positions are unwound and capital flows back into Japanese bonds and stocks, related funds will flow out of US equities. He said bluntly, "The S&P 500 and large-cap tech sector have recently shown an inexplicable heaviness lacking clear fundamental explanations—this may simply be leverage and carry trades quietly dissipating."

"Mystery Buyer" of AI Tech Options Reemerges

Despite the overall cautious sentiment, some corners of the market are showing noteworthy contrarian signals. McElligott revealed that since last Friday and the reopening after the Labor Day holiday, Nomura's trading desk has observed a large volume of Flex Call options being traded on multiple "concentrated AI" stocks—the very names that saw massive liquidation during this summer's crash.

According to Nomura's tracking data, this "mystery buyer" has so far accumulated approximately $315 million in option premiums, $110 million in delta exposure, and $5.8 million in vega exposure. Over the past 48 hours, the related stocks have rebounded sharply, including AMD (+10.9%), INTC (+14%), and CRWV (+18%). This "return of AI/tech option buying" is once again generating the positive correlation dynamic of "spot rising alongside rising volatility." After single-stock volatility was battered earlier, this dynamic is bringing positive contributions back to volatility dispersion trades (short-correlation strategies).

Korean Market Also Warms Up, Funds Accelerate into Semiconductors

The same "adding positions" logic is being confirmed in Asian markets. McElligott pointed out that after the Korean market reopened on Sunday/Monday, it recorded its second-largest single-day net foreign inflow on record (coupled with record share buybacks), second only to the massive "buy-the-dip" day on July 31. This echoes the signal of renewed AI option buying in the US market—institutional funds are accelerating their return to Korea, semiconductor, and memory sectors. McElligott believes this phenomenon "deserves close attention."

However, he also cautioned that as net exposure recovers from extremely low levels, investors now "have something to hedge." Currently, the 3-month call skew has risen to the 91st percentile historically, indicating the market is starting to buy insurance for potential upside breakouts, but the overall deleveraging trigger threshold remains close at hand.

Goldman Sachs Takes a More Optimistic Stance: Fundamentals and IPO Could Be Catalysts

Compared to McElligott's cautious conclusion, Goldman Sachs' John Flood's judgment leans clearly more optimistic, believing that the current cautious sentiment has over-priced risk. From a fundamental perspective, Flood noted that S&P 500 constituents' year-over-year EPS growth for Q2 2026 (the latest full earnings season) is approximately 30%; hyperscalers and AI infrastructure companies are seeing earnings growth of 54% year-over-year, contributing about 50% of overall S&P 500 earnings growth; excluding the energy sector, the remaining constituents' earnings are growing at 14% year-over-year.

However, the market's current reflection of these strong fundamentals is clearly insufficient: while mutual fund cash ratios are low, absolute levels remain above historical averages; institutional investors are generally underweight AI-related stocks; and individual investor sentiment remains persistently in bearish territory. Flood believes the upcoming wave of IPOs could serve as a catalyst to activate institutional and retail investors to "attack" again.

Meanwhile, McElligott left another warning: if momentum-driven CTA strategies continue to lose trend signals in range-bound equity index futures, the distance between long signals across multiple global futures and "deleveraging trigger points" is narrowing. Should the market weaken, it would produce a trend-following sell-off effect similar to "synthetic negative gamma."